Exposing Healthcare Fraud with Jonathan Tycko | E. 68

Episode Introduction 

Jonathan explains why the value of healthcare related cases under the False Claims Act ($1.8 billion recovered in 2022) represents only a fraction of the real total, why most people are reluctant to become whistleblowers, and shares the universal mistake all health systems make. He also urges hospitals to focus on mission over money and explains why compliance isn’t the enemy of healthcare.

Show Topics

• Representing whistleblowers in qui tam lawsuits
• Understanding healthcare fraud
• Analyzing statistics in healthcare fraud 
• Whistleblowers share key characteristics
• The risks of becoming a whistleblower
• Compliance should not be seen as a problem
• Hospitals must focus on mission, not money

02:46 Representing whistleblowers in qui tam lawsuits

Jonathan explained his move into the healthcare niche, and the meaning of ‘’qui tam.’’

‘‘’This particular practice that I’m in now where I represent whistleblowers for reasons we can get into as we go along here, tends to be very focused in the healthcare sector….about 15 years ago, I got a call from a person who was involved in one of these cases and he says, “I’m a relator in a qui tam lawsuit and I’m looking for a new lawyer to help me with an appeal.” And I said, “I don’t even know what those words mean.” Even though I had been practicing law for about 15 years at that point I had never heard of these kinds of cases before. It is really a very niche practice, there are very few of them. But I took his case and through that really learned a little bit about the False Claims Act, which is the statute we operate under mostly. And just got really interested in it from that one case. And then slowly over time started to look for other opportunities to represent clients in that area. Did a little marketing and so forth and over time built up the practice. And now this is almost exclusively what I do as a lawyer, which is representing whistleblowers in what are called qui tam lawsuits, which is where a whistleblower is bringing a claim for some type of fraud, where the fraud is really committed on somebody else, usually the government or government programs. But it is brought by a private whistleblower that is specifically authorized by certain laws.’’

06:03 Understanding healthcare fraud

Jonathan said any type of fraud in healthcare is likely to fall within the False Claims Act due to the extent of government funding.

‘’Well, at a very high level of generality, it’s just what it says. It’s any type of fraud scheme that is impacting the healthcare system. What we’re focused on a little bit more specifically is, like I said, there’s this statute called the False Claims Act, which makes it illegal to basically commit fraud on the government or on programs that are funded with government dollars. And as you know, obviously a huge percentage of healthcare spending is funded through Medicare, Medicaid, Tricare, the VA system, and these are all programs that are covered by the False Claims Act. So any type of fraudulent conduct or unlawful conduct that is widespread and that impacts the healthcare industry is likely to cross paths with the False Claims Act because of all those government dollars that are used to fund our healthcare system. And so any sort of fraud… And I can run through a whole bunch of different categories and give you some sense of what the types of cases are, but pretty much any type of fraud that is ongoing in the healthcare industry is likely to also violate the False Claims Act. And so a whistleblower, somebody who has non-public information about that fraud, is a potential whistleblower under that statute.’’

07:45 Analyzing statistics in healthcare fraud

Jonathan said that the high levels of healthcare spend makes it difficult to provide accurate figures on fraud.

‘’It’s really hard. It’s an interesting question. It’s really hard to talk about fraud in a statistical sense because you only know about what gets reported. And so you never really know how much fraud is occurring that you don’t know about. So what I can give you some sense of is what is reported by various government agencies that have access to some statistics. So what we know is that pretty much every study that’s done of any government program where they’re looking at what are the rates of what folks in the government call fraud, waste, and abuse. So it’s not all just intentional fraud, but it’s also just wasted money. They’re looking at, “If we spend a billion dollars, how much of that is going to actually go to the program and how much of it is going to just get siphoned off through fraud, waste, and abuse? And they pretty much always conclude that it’s about 10%, which is a shockingly high number, but that’s usually what they conclude. And so what I can tell you is I can give you some more very, very specific statistics. So if we look at just this past year, 2022. The government reports statistics under the False Claims Act every year. So in 2022, the government recovered about 1.8 billion in healthcare related False Claims Act cases. And that’s somewhere around 2 billion a year. Again, that’s what they recover. So the actual amount of fraud is probably some multiple of that. And that’s just the federal government, right? The state governments recover more on top of that if there are Medicaid dollars, because Medicaid is jointly funded by the federal government and by state governments. So that’s even a little bit of an underestimate. My sense is probably the real number is about 5 billion a year in recoveries and maybe five X or 10 X more of that that isn’t recovered. So it’s a lot. And it’s a lot because healthcare spending is so huge.’’

12:44 Whistleblowers share key characteristics

Jonathan said most people are reluctant to take action when it comes to whistleblowing.

‘‘’….everybody, when you ask them in the abstract, “Well, if you saw your employer doing something illegal, would you turn them in?” I think most people would say, “Oh, yeah. Yeah. Of course I would.” But then in practice, most people actually don’t because we have these very, very strong instincts to want to get along with the people we know and work with. It turns out that most people, even most good people who would never themselves do something dishonest, won’t blow the whistle when they see it happening in an employment setting. And what I’ve noticed is that the people who do, the people are willing to blow the whistle, tend to have some fairly unique personality types. They’re people with a strong sense of self-identity. They’re not necessarily people who are just going to go along to get along. They have a strong sense of right or wrong. Often they have a strong sense of patriotism because a lot of these cases have to do with injuries being done to the government and to taxpayer dollars. And so they have this sense of wanting to stick up for the country or for the community. And so they’re often are motivated by some strong personality trait, and they tend to be very strong-willed people.’’

13:36 The risks of becoming a whistleblower

Jonathan said whistleblowers risk dismissal from their jobs for raising concerns with employers and play a key role in providing information.

‘’And this goes to the question of what is the role of whistleblowers within organizations? Often by the time somebody has called me, they’ve already tried to solve the problem internally at the company or in the office or with their employer. And what they’ve run into is being told to keep their mouth shut, being dismissed, being told they’re crazy, maybe being fired because the company doesn’t want to deal with it. And so they’ve tried to fix the problem and they had been met with this stonewalling or evidence that the company isn’t going to deal with it. And that’s usually what’s happened before they call me. Then the next question is, “Well, what role does the whistleblower actually play in one of these cases?” And what are called again, qui tam cases. These are cases brought under the False Claims Act by the whistleblower. The main role in that case is for the whistleblower to actually provide the information to the government.’’

19:35 Compliance should not be seen as a problem

Jonathan said that healthcare’s focus on the bottom line is an obstacle to compliance.

‘’If they’re in a rush to ramp up the company and they’re trying to turn the company profitable and go public or sell it, trying to get to the next round of VC money or whatever it is, there’s a strong pressure to focus very much on the bottom line. And sometimes compliance issues can at least not stop that, but can slow it down a little bit. And so often when the whistleblower raises his or her hand and says, “Well, wait a second. Isn’t the way we’re marketing this drug or isn’t the way that we’re billing for this procedure, whatever the issue is, isn’t that maybe wrong?” There’s often, in companies like that, a tendency to instinctively say, “We don’t really want to hear about that.” No. No. Because God forbid the answer be, “Yeah. It’s wrong.” Then we might have to change how we do things and we don’t want to change how we do things. So there’s that instinctual resistance to it. So again, that’s a corporate culture thing. So what I would say is you can’t, and particularly in healthcare where it’s such a heavily regulated business, you can’t just view compliance as a problem. You have to view it as just part of the business, right? That you have to deal with compliance. You can’t have this negative view that compliance is just something to be minimized and dealt with. And so if a whistleblower within the company… They’re not really a whistleblower at that point, they’re just an employee who is raising an issue that they see in the company, right? They haven’t become a whistleblower yet.’’

30:06 Hospitals must focus on mission, not money

Jonathan said the priority in healthcare has to be the service provided.

‘’But don’t become obsessed with the money. It can’t be about the money as the first priority, right?The first priority has to be, “Let’s provide the service, provide the product, do it in a safe way, do it in an ethical way.” And if you do that and you do it well, you will make your money. But if you go into the healthcare business and you think making the money is the thing, your chances of running into legal problems go way up because it is a regulated industry. It’s a highly regulated industry. It’s an industry that the government watches carefully. And people within the industry, a lot of them do know about these whistleblower rights. And so maybe you can make some money for a little while, but eventually you’ll get caught. So just keep your eyes on the prize. And the prize should be, “Am I fulfilling whatever the mission of the company or my healthcare mission is?” Take compliance seriously. It’s just part of the business. It’s not something outside the business that you have to view as the enemy. You have to view compliance as just part of the business and take it seriously. So from my perspective, that’s what I would say to somebody running a healthcare entity.’’

Show Links

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Connect with Jonathan Tycko on LinkedIn

Check out VIE Healthcare and SpendMend 

You’ll also hear: 

The niche nature of whistleblowing in healthcare: ‘’There are only about 600 of these cases that are filed nationwide every year. And just to give you some sense, that is out of about 400,000 cases that are filed every year in federal court. So this is tiny, it’s one 10th of 1% of the lawsuits in the country.’’

The potential rewards for whistleblowers in successful cases: ‘’In some of these cases the recoveries are quite large. Just in fiscal year 2022, the last reported fiscal year, the federal government paid $488 million to the whistleblowers in False Claims Act cases.’’

Why not taking whistleblowers seriously is the universal mistake made by healthcare systems. 

Why a feedback loop is essential in encouraging people to become whistleblowers. ‘’Sometimes the employee thinks the company is doing something illegal, but actually they’re not. And so it’s also important, I think, to have a feedback loop that goes back to the employee that says, “Yeah. We’ve heard you.” 

Understanding the process: Why litigation can take years. ‘’The process is slow. The government investigations often take months or years to complete. And then if you have to litigate on top of that, that’s more months and years. And in some sense, the stronger cases take the longest because those are the ones that get investigated the hardest, that have the most dollars at stake.’’

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Episode Transcript 

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Jon (00:00): Often, by the time somebody has called me, they’ve already tried to solve the problem internally at the company or in the office or with their employer. And what they’ve run into is being told to keep their mouth shut, being dismissed, being told they’re crazy, maybe being fired. Speaker (00:21): Welcome to the Healthcare Leadership Experience Podcast, hosted by Lisa Miller and Jim Cagliostro. Lisa is the founder of VIE Healthcare Consulting and now managing director at Spend Mend. Lisa and her team has generated over $1 billion in financial improvements for VIE’s clients since 1999. Since 2007, Jim has been a registered nurse working in critical care, perioperative services, and outpatient settings at nationally recognized medical facilities across three states. You’ll hear conversations on relevant and trending topics in healthcare and much more. Now, here’s your hosts, Lisa and Jim. Jim (01:00): Hi, this is Jim Cagliostro and you’re listening to the Healthcare Leadership Experience. Today’s guest is Jon Tycko, attorney representing whistleblowers at Tycko & Zavareei LLP. And I’m personally excited to learn more about his line of work, especially as it relates to healthcare fraud and whistleblowers. Jon will talk a little bit about it, but his work extends beyond healthcare. But obviously today we’re going to be looking specifically at healthcare fraud, whistleblowers, and wherever else the conversation takes us. So welcome Jon and thanks for joining us today. Jon (01:32): Yeah. Hi Jim. And thanks for having me on. Looking forward to chatting with you. Jim (01:36): Absolutely. So first, I always like to hear from our guests. Can you tell us a little more about yourself, your background, what you do, and really what drew you to this field of representing whistleblowers in particular? And really anything else that has prepared you for that role? Jon (01:52): Okay. Yeah. Well, I am a lawyer and I’ve been practicing law for about 30 years. And I’m what they call a civil litigator. So I represent people and companies in civil lawsuit in court. My background is that I come from a family that is very science and healthcare focused. I was the weird aberration that ended up at law school, but both my parents, both my brothers, my wife and both of my children all are in the science or healthcare world. Jim (02:22): Okay. Jon (02:22): So I’ve been surrounded by that and so as a lawyer I’ve always really enjoyed working on cases that have some sort of technical aspect to them in science or healthcare. And this particular practice that I’m in now where I represent whistleblowers for reasons we can get into as we go along here, tends to be very focused in the healthcare sector. Jon (02:46): Lots of cases that deal with various types of issues in healthcare. And I got into this somewhat randomly. When you look back, I’m in my mid-fifties, so when you look back on all the things that led you to where you are, it tends to just be a story of random events more than a plan. I didn’t come out of the womb thinking I was going to be a healthcare lawyer. But really about halfway through my career, maybe about 15 years ago, I got a call from a person who was involved in one of these cases and he says, “I’m a relator in a qui tam lawsuit and I’m looking for a new lawyer to help me with an appeal.” And I said, “I don’t even know what those words mean.” Even though I had been practicing law for about 15 years at that point I had never heard of these kinds of cases before. Jon (03:32): It is really a very niche practice, there are very few of them. But I took his case and through that really learned a little bit about the False Claims Act, which is the statute we operate under mostly. Jim (03:43): Okay. Jon (03:44): And just got really interested in it from that one case. And then slowly over time started to look for other opportunities to represent clients in that area. Did a little marketing and so forth and over time built up the practice. And now this is almost exclusively what I do as a lawyer, which is representing whistleblowers in what are called qui tam lawsuits, which is where a whistleblower is bringing a claim for some type of fraud, where the fraud is really committed on somebody else, usually the government or government programs. Jim (04:15): Sure. Jon (04:16): But it is brought by a private whistleblower that is specifically authorized by certain laws. That’s kind of what I do. Jim (04:22): Great. So you did answer… My next question was going to be, “Well, what does qui tam mean?” But thank you for that. Jon (04:26): Yeah. Jim (04:27): And you’re based in Washington, DC, correct? But your work extends across the country or…? Jon (04:33): Yes. Our offices are in Washington, DC and California. I’m in the DC area, but the practice is not a local practice. My cases are all over the country. Like I said, this is a very niche practice. There’s only about 600 of these cases that are filed nationwide every year. And just to give you some sense, that is out of about 400,000 cases that are filed every year in federal court. So this is- Jim (04:57): Wow. Jon (04:58): Tiny, it’s one 10th of 1%- Jim (04:59): Okay. Jon (05:00): Of the lawsuits in the country. So there’s very few lawyers that do what I do. And we all tend to operate on a nationwide basis because of that. Jim (05:10): Sure. Sure. Jon (05:10): Yeah. Jim (05:11): Well, you also mentioned something that I think we hear from a lot of our guests and the way you put it was you’re building up to what you do now is a series of random events. Jon (05:19): Yeah. Jim (05:19): Maybe that’s not your exact words, but I truly believe that every person we interview, and especially in healthcare I really value this, where your experience and what you’ve seen and the cases that you’ve worked is unique. Nobody else has really gone through that. So you bring something to the table that nobody else can and I appreciate that. I’m glad you mentioned it. Jon (05:38): Yeah. I probably overstated. I was already a lawyer. I was already a litigator. And I was able to understand what this person was talking about when they called me, but this particular sort of niche practice area is one that I did fall into. Yeah. Jim (05:50): Yeah. Awesome. So when we talk about healthcare fraud specifically, what does that encompass? If you could maybe dig into that a little bit more. Can you explain to our listeners exactly what we’re talking about when we say the term, “Healthcare fraud?” Jon (06:03): Sure. Well, at a very high level of generality, it’s just what it says. It’s any type of fraud scheme that is impacting the healthcare system. What we’re focused on a little bit more specifically is, like I said, there’s this statute called the False Claims Act, which makes it illegal to basically commit fraud on the government or on programs that are funded with government dollars. And as you know, obviously a huge percentage of healthcare spending is funded through Medicare, Medicaid, Tricare, the VA system, and these are all programs that are covered by the False Claims Act. Jon (06:40): So any type of fraudulent conduct or unlawful conduct that is widespread and that impacts the healthcare industry is likely to cross paths with the False Claims Act because of all those government dollars that are used to fund our healthcare system. And so any sort of fraud… And I can run through a whole bunch of different categories and give you some sense of what the types of cases are, but pretty much any type of fraud that is ongoing in the healthcare industry is likely to also violate the False Claims Act. And so a whistleblower, somebody who has non-public information about that fraud, is a potential whistleblower under that statute. Jim (07:21): Sure. So would you say… I know you gave us some numbers, but… Jon (07:25): Yeah. Jim (07:25): How big of an issue is healthcare fraud today? Is it something that’s more prevalent today than say 10 years ago? And I don’t know if you can touch on, is it more prevalent in specific sectors of healthcare? Are we talking hospitals? Are we talking private practices? Physician groups? Where do you see it more often? What cases are you seeing? Jon (07:45): Yeah. It’s really hard. It’s an interesting question. It’s really hard to talk about fraud in a statistical sense because you only know about what gets reported. And so you never really know how much fraud is occurring that you don’t know about. So what I can give you some sense of is what is reported by various government agencies that have access to some statistics. So what we know is that pretty much every study that’s done of any government program where they’re looking at what are the rates of what folks in the government call fraud, waste, and abuse. So it’s not all just intentional fraud, but it’s also just wasted money. They’re looking at, “If we spend a billion dollars, how much of that is going to actually go to the program and how much of it is going to just get siphoned off through fraud, waste, and abuse?” Jim (08:31): Sure. Jon (08:32): And they pretty much always conclude that it’s about 10%, which is a shockingly high number, but that’s usually what they conclude. Jim (08:39): Yeah. Jon (08:39): And so what I can tell you is I can give you some more very, very specific statistics. So if we look at just this past year, 2022. The government reports statistics under the False Claims Act every year. So in 2022, the government recovered about 1.8 billion in healthcare related False Claims Act cases. Jim (09:02): Okay. Jon (09:03): And that’s somewhere around 2 billion a year. Again, that’s what they recover. So the actual amount of fraud is probably some multiple of that. And that’s just the federal government, right? The state governments recover more on top of that if there are Medicaid dollars, because Medicaid is jointly funded by the federal government and by state governments. Jim (09:25): Right. Jon (09:25): So that’s even a little bit of an underestimate. My sense is probably the real number is about 5 billion a year in recoveries and maybe 5X or 10X more of that that isn’t recovered. So it’s a lot. And it’s a lot because healthcare spending is so huge. Jim (09:43): Okay. Yeah. Jon (09:44): Right? And so on a percentage basis, this still isn’t that big. And what I always tell people is, “I deal with bad actors in the healthcare industry, but I don’t think the healthcare industry is rife with bad actors. It’s just that there are some of them, just like there are bad actors in every industry, and because the healthcare industry is so big and so much of it is funded by federal dollars, that it quickly adds up to billions and billions.” Jim (10:08): That’s a great point. And we talk also about security and bad actors in terms of cybersecurity and healthcare is a big target because of the amount of information that is stored with hospitals and healthcare organizations. But like you said, the amount of money that is involved, and that’s why bad actors are targeting healthcare, even if it’s not overwhelming in terms of the number of bad actors, it’s a big target. So that’s a great point. Jon (10:34): Yeah. Yeah. Yeah. And there are so many players. As you know the healthcare industry is the pharmaceutical companies, it’s medical device companies, it’s hospitals, it’s physician practice groups- Jim (10:44): Sure. Jon (10:44): It’s dentists, chiropractors, physicians’ assistants, nurse practitioners, every kind of therapist you can imagine. So there’s hundreds of thousands of individual providers who are billing the system in various ways. And so again, it only takes a small percentage of those people to go off the rails and all of a sudden, you’re looking at very large frauds. Jim (11:04): No, that’s a great point. Great point. Jon (11:05): Yeah. Yeah. Jim (11:06): If you’re just tuning in, you’re listening to the Healthcare Leadership Experience and I’m your host, Jim Cagliostro. This show is sponsored by VIE Healthcare Consulting, a SpendMend company, which provides leading edge financial and operational consulting for hospitals, healthcare institutions, and other providers of patient care. Since 1999, VIE has been a recognized leader in healthcare costs, hospital purchase services, healthcare benchmarking, supply chain management, and performance improvement. You can learn more about VIE Healthcare Consulting at viehealthcare.com. Jon (11:38): Okay. So I want to dig into this concept of whistleblowers. What is the role of whistleblowers? If you want to define it, how you define it, and then why is it so difficult? And I really want to spend some time on this. Why is it so difficult for many to speak up when they want to do the right thing? But whistleblowers a lot of times there’s a hesitancy. “Maybe I should just keep quiet.” But what are your thoughts on that? Jon (12:03): Yeah. Yeah. Well, there have been studies that psychologists or sociologists have done about whistleblowing in general and why does it occur, why does it not occur? Who are the people that become whistleblowers and so forth? And what I’ve read about that is also consistent with my personal experience talking to many of these people over the years. And that’s that even though I think everybody, when you ask them in the abstract, “Well, if you saw your employer doing something illegal, would you turn them in?” I think most people would say, “Oh, yeah. Yeah. Of course I would.” But then in practice, most people actually don’t because we have these very, very strong instincts to want to get along with the people we know and work with. Jim (12:44): Yes. Jon (12:44): To assume the best. To not stick our necks out. To not do things that we worry are going to get ourselves ostracized or hurt our own careers. And so it turns out that most people, even most good people who would never themselves do something dishonest, won’t blow the whistle when they see it happening in an employment setting. And what I’ve noticed is that the people who do, the people are willing to blow the whistle, tend to have some fairly unique personality types. They’re people with a strong sense of self-identity. They’re not necessarily people who are just going to go along to get along. They have a strong sense of right or wrong. Often they have a strong sense of patriotism because a lot of these cases have to do with injuries being done to the government and to taxpayer dollars. Jim (13:35): Sure. Jon (13:36): And so they have this sense of wanting to stick up for the country or for the community. And so they’re often are motivated by some strong personality trait, and they tend to be very strong-willed people. And then also, I will say that… And this goes to the question of what is the role of whistleblowers within organizations? Often by the time somebody has called me, they’ve already tried to solve the problem internally at the company or in the office or with their employer. And what they’ve run into is being told to keep their mouth shut, being dismissed, being told they’re crazy, maybe being fired because the company doesn’t want to deal with it. And so they’ve tried to fix the problem and they had been met with this stonewalling or evidence that the company isn’t going to deal with it. And that’s usually what’s happened before they call me. Then the next question is, “Well, what role does the whistleblower actually play in one of these cases?” Jim (14:36): Yeah. Jon (14:37): And what are called again, qui tam cases. These are cases brought under the False Claims Act by the whistleblower. The main role in that case is for the whistleblower to actually provide the information to the government. Jim (14:48): Okay Jon (14:50): And when you file one of these cases, the government through the Department of Justice, and if it’s a healthcare case through Health and Human Services, they will open an investigation. So the filing of one of these cases is a way to rigor the government enforcement powers, if you will, to at least start to investigate the thing that the whistleblower thinks is wrong. And then ultimately, if the case is successful and there is a recovery back to the government, the whistleblower gets a reward. They get a share of the government’s recovery. So there is a backend reward to the whistleblower, an incentive to do this. Or another way to think of it is a compensation, a reward for having stuck their neck out on behalf of the government. Jon (15:36): And those rewards can be big because they’re a percentage of the government’s recoveries. And in some of these cases the recoveries are quite large. So again, I can just give you some statistics. Just in fiscal year 2022, the last reported fiscal year, the federal government paid $488 million to the whistleblowers- Jim (15:56): Wow. Jon (15:57): In False Claims Act cases. The whistleblowers can make some money at the backend. Now, this is many years after the start of the case, only if the case is successful, which many are not for lots of reasons. So it’s not really a reason to do it, honestly, but it is a nice little consolation prize at the end for the whistleblowers. And in big successful cases, the whistleblowers do end up with large financial rewards. Jim (16:21): I appreciate you walking us through that. That’s honestly an aspect of it that I really haven’t thought much about. But yes, the financial reward. But I think you touched on, I’m glad you got into this psychology of a whistleblower. In the healthcare setting we have… I’m looking back years to a situation where something was done that was against policy and coworkers, we’re nurses at the bedside and it’s like, “Okay. I know this wasn’t right,” but I have a relationship with this coworker that everyone gets along with, everyone loves. But this one individual, like you described the strong sense of identity, the personality, strong-willed, strong sense of versus wrong. This person who was close with the one who didn’t go by policy ended up reporting it and not a major thing, but something that they felt needed to be reported. Jon (17:07): And I think that psychology part of it is a big piece because you’re right, we want to get along with our coworkers or whoever it is, whatever situation, these people that we’re with every single day. And it’s like, “You’re not looking at it for the money, but things weren’t done as they should have been done.” Jon (17:22): Yeah. Jim (17:23): And so I appreciate you bringing that out and then walking us through the process. But like you said, years… Are you talking a decade later or typically not that long? Jon (17:31): No, it’s not a decade, but it can be multiple years. The process is slow. The government investigations often take months or years to complete. And then if you have to litigate on top of that, that’s more months and years. So you’re talking multiple years usually from start to finish of a successful case. And in some sense, the stronger cases take the longest because those are the ones that get investigated the hardest, that have the most dollars at stake. Jim (18:00): Sure. Jon (18:00): And so on and so forth. So yeah. Jim (18:01): So I guess getting on to the next step from there is what can hospitals and health systems do, or even what have hospitals and health systems done, to minimize the risk of healthcare fraud and to increase transparency, accountability? Have you seen steps, maybe generally speaking or if you want to share specific examples, that hospitals and health systems have taken to minimize the risk of fraud and to increase transparency? Jon (18:25): Sure. There are a number of steps that I would say are sort of prophylactic, the things that a large healthcare institution should be doing no matter what. And then on top of that, in the cases that we become involved in where there is a settlement or a judgment at the end, there are often additional compliance measures that are imposed on the companies by the government as a result of that. So I guess what I would say is just from my perspective as somebody who has dealt with whistleblowers and represented whistleblowers is, as I said, the almost universal mistake that I see the particularly larger companies making is not taking the whistleblowers seriously in the first instance. Jim (19:08): Okay. Jon (19:09): And this is a corporate culture issue, I guess. It really does flow down from the top often in companies. The companies that are the most aggressively bottom line are also often the ones who are the least interested in compliance because those two things often run counter to each other in a certain way. If the – Jim (19:34): Compliance gets in the way? Yeah. Jon (19:35): Yeah. Or at least it’s perceived that way often by the people at the top of the company. If they’re in a rush to ramp up the company and they’re trying to turn the company profitable and go public or sell it, trying to get to the next round of VC money or whatever it is, there’s a strong pressure to focus very much on the bottom line. And sometimes compliance issues can at least not stop that, but can slow it down a little bit. And so often when the whistleblower raises his or her hand and says, “Well, wait a second. Isn’t the way we’re marketing this drug or isn’t the way that we’re billing for this procedure, whatever the issue is, isn’t that maybe wrong?” There’s often, in companies like that, a tendency to instinctively say, “We don’t really want to hear about that.” No. No. Because God forbid the answer be, “Yeah. It’s wrong.” Then we might have to change how we do things and we don’t want to change how we do things. Jim (20:26): Right. Jon (20:27): So there’s that instinctual resistance to it. So again, that’s a corporate culture thing. So what I would say is you can’t, and particularly in healthcare where it’s such a heavily regulated business, you can’t just view compliance as a problem. You have to view it as just part of the business, right? That you have to deal with compliance. You can’t have this negative view that compliance is just something to be minimized and dealt with. And so if a whistleblower within the company… They’re not really a whistleblower at that point, they’re just an employee who is raising an issue that they see in the company, right? They haven’t become a whistleblower yet. Jim (21:06): Yeah. Jon (21:06): Take those people seriously, really listen to them and don’t just sweep them under the rug. That’s the main advice. Jim (21:13): Sure. I don’t know if you’ve seen it more often or we’ve seen even with our cybersecurity in places that I’ve worked where there’s an anonymous way to submit a concern. Jon (21:23): Yeah. Jim (21:23): And I think some of it is to protect the individual who’s reporting it. “Hey, I might have messed up, or I might have-” Jon (21:28): Yeah. Jim (21:28): “Clicked on a link I shouldn’t have clicked on.” Again, these are cybersecurity issues. Jon (21:33): Yeah. Jim (21:33): But you see hospitals and health system using some sort of anonymous hotline or anonymous website- Jon (21:39): Yeah. Jim (21:39): Where that would encourage whistleblowers or those who could potentially become whistleblowers? Jon (21:44): Yeah. Those are good systems to have. I will say that I think part of a good compliance system in dealing with employee concerns is not just hearing the concerns, but it’s also the feedback loop that goes back to the employee. Because sometimes the concerns are legitimate and sometimes the employee is wrong. Jim (22:03): Okay. Yeah. Jon (22:04): Sometimes the employee thinks the company is doing something illegal, but actually they’re not. And so it’s also important, I think, to have a feedback loop that goes back to the employee that says, “Yeah. We’ve heard you.” And either, “Here’s what we’re going to do to fix the problem.” Or, “No, we don’t think it’s a problem and here’s why,” to try to explain it back to the employee. Because sometimes I will get calls from people who are like, “Oh my God, my company is doing X, Y, and Z. That’s totally illegal.” And then we look into it and then we have to go back to them and say, “Maybe that’s not illegal.” Jim (22:36): Sure. Jon (22:37): And they hear from us for the first time the explanation for why the company is doing the thing it’s doing. They’ve never heard it from their actual employer, right? Jim (22:45): Yeah. Jon (22:45): And if the employer had just gone back to that person and said, “Yeah. Thank you. Thank you for raising the concerns, we took them seriously, but here’s why we’re doing what we’re doing.” Then they would never have called me, right? Jim (22:56): Yeah. Yeah. Jon (22:58): If you’re the owner of a company you don’t want your employees calling me. It’s not a good place to be in. So… Jim (23:04): Completely understand. Jon (23:05): Yeah. Listen to whistleblowers. But also I think that feedback loop that goes back to the employee. And so I think that’s one of the downsides to these anonymous tip lines, which is, yeah, the information is maybe flowing up, but the employee doesn’t necessarily know then what’s being done with that information, right? Jim (23:23): Sure. That’s great insight. And that’s something, again, I really haven’t taken much thought to, but it is… Yeah. You want to make sure that there’s an understanding because an employee might see something from their perspective, but maybe they’re missing a few pieces that, “Hey, oh, that changes things.” Jon (23:38): Yeah. Jim (23:38): So I guess going on to that next step, so somebody does realize, “Hey, there’s something going on. We know it’s not right. I know I need to speak up.” What is the next step for someone? You said you know about someone calling you, obviously you keep it in-house initially, you see if you can address it. But what would be the next step if it’s not being addressed in-house and you know, “Hey, we’re definitely hiding something or doing something that’s not right, not legal.” How do you proceed? Jon (24:05): Sure. So the whole game in these cases is how you present the case to the government. Because the first step in the case is what we call a disclosure statement. And that is basically a memorandum written by the lawyer that goes to the Department of Justice, who has a whole team of lawyers that handle these cases. And that memorandum has to explain to those lawyers, “Here is what my client is saying is happening. And here is the evidence that shows that it’s happening. And here is why we think it’s illegal,” right? And it’s really that second step that is the most important. What is the evidence? Jim (24:43): Okay. Jon (24:43): It’s not enough to just have a “he said, she said” story. Jim (24:47): Right. Jon (24:48): So often what we’re doing when a potential whistleblower comes to us is we have to vet that case. We spend a lot of time with the person hearing what they have to say, but also looking at whatever information they have. Often people have communications they’ve had, some documents and some data, whatever the issue is, it can vary quite a bit. Jim (25:07): Sure. Jon (25:08): Or there’s other people in the company who are willing to back them up. And we try to look at it through the eyes of a government prosecutor and say, “Is there a case here?” And we try to help them put that together. And sometimes we say, “You don’t have enough. We don’t really think you should file.” Because you don’t want to file one of these cases and then not have it go anywhere because then you really are exposing yourself. But in the strong cases where something really serious is happening and where there is some evidence of it, we then help the client package that. That then goes to the Department of Justice. There is a filing in court as well. That filing is secret, it’s under seal. So the company that is being accused of the wrongdoing or the individual that’s being accused of the wrongdoing doesn’t know about this process. It’s secret from them. Jim (25:51): Okay. Jon (25:51): The only people that know are the court and the lawyers of the Department of Justice. And often, again, in healthcare cases, somebody at the Health and Human Services Office of Inspector General where they have people who investigate and audit healthcare fraud cases. Jim (26:08): Okay. Jon (26:08): So they’ll often be brought in, but that group knows about it. The whistleblower will be given a chance to meet with that group. They do an interview, an off the record information gathering interview from the whistleblower where the whistleblower can sit down with the government lawyers and investigators and answer their questions. And then if you’ve done a good job of all that, if you’ve done a good job of presenting the case and packaging the case and trying to convince the government that something bad is happening, the Department of Justice will assign lawyers to the case. Jon (26:37): They open a file, they open an investigation, and then they will use all of the tools that they have available to them to investigate your case. So obviously the government has the ability to request an audit, to actually go in and look at files, to interview witnesses in a case that they think is strong and meets some threshold requirements. At their end, they have the ability to issue subpoenas to require a company or an office to turn over records to them. So they have lots of investigative tools that they could use to look into whatever the issue is, figure out if something wrong is happening and if there is to start to build the case. And then that process can take quite a while, but at the end of the process the Department of Justice makes what’s called an intervention decision. They either intervene in the case, which means that they think you’re right and something bad is happening and they want to pursue it. Jon (27:27): So they actually will come into the case, they file their own complaint against the defendant and move the case forward. They can also decline to intervene. They can say, “Well, we’re not going to do that.” And that’s often just a resources decision. They’re looking at all the things they could be doing. They might think, “Yeah. There is something wrong here, but of all the cases we have, this is not the most important. So we’re going to decline intervention.” And in that case- Jim (27:51): Okay Jon (27:52): The whistleblower can still then pursue the case on their own with their own lawyers. So if that’s us, we would then take over the case and litigate it. And then it becomes a regular lawsuit. It comes out from under seal, it’s no longer secret. Jim (28:04): Okay. Jon (28:05): The defendant learns about it. They obviously have a chance to defend themselves in court. They have the right to defend themselves. And at that point the case proceeds like a normal civil lawsuit to a conclusion. But the cases tend to stay secret and under seal because people are often very concerned about anonymity and, “When is my employer going to learn about this and-” Jim (28:25): Yeah. Jon (28:26): “Am I going to be retaliated against?” They tend to remain under seal and secret for a couple of years. So from the time you blow the whistle to the time your employer is going to learn about it, several years are likely to pass. And what we find is often by the time the case is no longer secret from the employer, the person who has brought the case has moved on to a new employer anyhow. Jim (28:47): Yeah. Yeah. Jon (28:48): So often the concerns about retaliation are alleviated just through the passage of time. Jim (28:54): Well, Jon, I really appreciate you walking us through that process. Like you said, a lot of that is in secret. So unless we’re personally involved or our work or we have some history with that, I personally really don’t know. Jon (29:05): Yeah. Jim (29:05): So I’m glad you walked us through that process. And the work that you do, it’s essential. It’s terrible that things like this happen, but we need people like you and firms like yours to address these issues because they’re real issues and they’re costly issues. I guess, because this is the Healthcare Leadership Experience I do like to get your thoughts. If there’s some piece of advice that you give to our listeners when it comes to leadership in healthcare, is there anything that you feel like you’ve learned along the way, whether for yourself or maybe you’ve seen it exemplified in, “Hey, here’s a health system that’s doing things right. Or here’s one that’s not doing things right and these are things to avoid.” Any leadership advice that you like to leave with our audience as we close up here? Jon (29:46): Well, I guess what I would say is, particularly in the healthcare industry, if you want to avoid legal problems, it’s not rocket science. Just keep your focus on the mission, the healthcare mission. Yes, it’s a business. Yes, you need to make money and there’s plenty of money to be made in healthcare, right? Jim (30:05): Right. Jon (30:06): But don’t become obsessed with the money. It can’t be about the money as the first priority, right? Jim (30:12): Yeah. Jon (30:13): The first priority has to be, “Let’s provide the service, provide the product, do it in a safe way, do it in an ethical way.” And if you do that and you do it well, you will make your money. You could say this of any business- Jim (30:26): Sure. Jon (30:26): Except in banking, where actually making the money is the thing, right? Jim (30:29): Right. Jon (30:30): But if you go into the healthcare business and you think making the money is the thing, your chances of running into legal problems go way up because it is a regulated industry. It’s a highly regulated industry. It’s an industry that the government watches carefully. And people within the industry, a lot of them do know about these whistleblower rights. And so maybe you can make some money for a little while, but eventually you’ll get caught. So just keep your eyes on the prize. And the prize should be, “Am I fulfilling whatever the mission of the company or my healthcare mission is?” Take compliance seriously. It’s just part of the business. It’s not something outside the business that you have to view as the enemy. You have to view compliance as just heart of the business and take it seriously. So from my perspective, that’s what I would say to somebody running a healthcare entity. Jim (31:17): That’s perfect, Jon. That’s perfect. Thank you for those words of wisdom. Really, you’re getting to my heart there about it comes back to the patient. We got to do the right thing. And I love what you said about compliance is it’s not just something from the outside. It’s part of the business. It’s part of it. Jon (31:32): Right. Jim (31:32): Thank you, Jon. Thank you for being on the show. And thank you to our listeners who spent time with us today. If you have questions about VIE Healthcare Consulting, a Spend Mend company, or if you want to reach out to me or Lisa Miller, you can find us on LinkedIn. Jon Tycko is also on LinkedIn, you can contact him there. We at VIE love helping hospitals save money and enhance the patient experience. We’re hoping that today’s episode gave you some new insights or ideas to consider and use in your career and in your own healthcare organization. So Jon, once again, thank you so much for being on the show with us today. Jon (32:05): Hey, thanks for having me on. It was a lot of fun. Speaker (32:08): Thanks for listening to the Healthcare Leadership Experience Podcast. We hope you’ve enjoyed this episode. If you’re interested in learning new strategies, best practices and ideas to utilize in your career and healthcare organization, check out our website at the healthcareleadershipexperience.com. And oh, yeah. Don’t forget to rate and review us. And be sure to join Lisa and Jim next time on the Healthcare Leadership Experience Podcast. Thanks again for listening.